Vermont Business Magazine Corporate Income Tax receipts were strong in March, which could bode well for revenues the rest of the fiscal year. Corporate tax returns were due on March 15 and economists have suggested that business profits could lead to an increase in Personal Income Tax revenues, in what they called an "April surprise." Taxpayers who received dividends and bonuses at the end of last year, predicated on the success of their business, could find themselves paying more in taxes (and getting less in refunds) than they expected and withheld. The result being a windfall of tax revenue for the state.
Secretary of Administration Justin Johnson released the preliminary March fiscal year (FY) 2015 revenue results today for the General, Transportation, and Education Funds. The revenue targets are based on the Consensus Revenue Forecast adopted by the Vermont Emergency Board on January 20, 2015. Preliminary General Fund (GF) revenues totaled $98.21 million for March 2015, +$5.11 million or +5.49% above the monthly target. Year-to-date, GF receipts are $966.81 million, +$12.06 million or +1.26% above the cumulative target. The results are +$40.59 million or +4.38% above the year-to-date results of the prior fiscal year (FY 2014).
Revenue forecasts were lowered in January primarily because of weakness in Personal Income Tax withholding.
“Importantly we continue to see solid year-over-year growth in the General Fund,” Secretary Johnson said. “March’s receipts were attributable to reduced levels of refunding activity in Corporate Income Tax receipts. The resulting above target Corporate receipts offset below target performance in Personal Income (PI) Taxes. While we anticipated some negative March impact in PI receipts due to the week+ moratorium on refunding activity in February, the shortfall in PI was more than expected and due to continued underperformance in PI Withholding. The consumption taxes (Sales & Use and Rooms & Meals) were also below their monthly targets by -5.40% and -0.84%, respectively."
The Transportation Fund (TF) results were above target for March, closing the year-to-date shortfall to 0.07%. Preliminary TF reve-nues finished at $22.82 million, +$1.11 million, or +5.11% ahead of the target. On a cumulative basis, TF revenues were $186.23 million, -$0.13 million or -0.07% below the cumulative target. Compared to the prior fiscal year (FY 2014), TF revenues were +$6.91 million or 3.85% ahead.
The Education Fund (EF) fell below the monthly target for March 2015 due to shortfalls in both Sales & Use Tax and Motor Vehicle Purchase & Use Tax. Preliminary EF revenue finished at $13.01 million, -$0.53 million, or -3.89%, below its monthly target. Year-to-date EF revenues were $135.44 million or -0.19% behind the cumulative target. As compared to the prior fiscal year, March EF results were +$5.19 million or +3.99% higher than the same period for FY 2014.
Johnson concluded, “March has provided some us with a small cushion in receipts to date. April - the largest single month for receipts - will tell us if that cushion is enough. We will track April results daily, as we move through the most critical revenue month of the year.”
Source: Vermont Agency of Administration 4.3.2015